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After a heinous August and a rather inauspicious start to September as triple-digit declines in the Dow set the stage, low-risk investments now are in focus.

But investors should not make the mistake of thinking they have to settle for low-risk, low-return investments. There are a host of high-yield stocks out there with big dividends and stable cash flows that have been enjoying significant share appreciation in 2011. These investments offer the best of both worlds — cash-rich blue chips that throw off plump dividends as well as outperform the major indices.

True, some of these blue chips could see momentum wane in the months ahead as successes become harder to duplicate in coming quarters, or shares move into overbought territory. And yes, blue-chip dividend stocks are not immune to market downturns. However, there’s a lot to be said for strong upward momentum in a tough market and a nice quarterly income stream to hedge your bets.

Here are five high-yield blue chips that have dramatically outperformed the major indexes so far in 2011, posting double-digit returns despite a roughly 8% slide for the S&P 500 and a 5% decline for the Dow Jones Industrial Average. (Returns are as of Tuesday’s close to accommodate this column’s deadline.)

Consolidated Edison

Dividend yield: 4.3%

Year-to-date return: 11.8%

Consolidated Edison (NYSE:ED) is the definition of a boring dividend stock. A regional electric and gas utility, you’ve probably never heard of it if you live outside the tri-state New York, New Jersey and Pennsylvania area.

But shares have dramatically outperformed the market so far this year, tacking on double-digit gains year-to-date. So what gives?

True, Consolidated Edison didn’t set the world on fire with its August earnings report. Net income fell slightly but topped expectations. But perhaps the biggest reason for longer-term performance is the previous streak of four consecutive quarters with year-over-year profit increases. In the first quarter, for instance, net income rose 37.1% over 2010 numbers.

It’s obviously unrealistic to expect a utility to keep up that streak forever. And Wall Street price targets for Consolidated Edison aren’t predicting much more upside after the current run. But momentum can’t be underestimated in this environment, where investor psychology is at play as much as fundamentals.

On the dividend front, ED has upped its payout every year for 36 straight years and has paid a dividend since 1885. And a reliable 4.3% yield with a history like that is a pretty good selling point for investors even if shares do move sideways for a bit.

Bristol-Myers Squibb

Dividend yield: 4.5%

Year-to-date return: 10.6%

Bristol-Myers Squibb (NYSE:BMY) has defied the downdraft in Big Pharma during the past few years. That trend has continued in 2011, as shares have tacked on 10.6% thanks to strong numbers and a promising drug pipeline.

In July, Bristol-Myers raised its fiscal 2011 guidance after profits slumped slightly but sales jumped more than 14%. This was after an earnings increase of 33% in the first quarter. But perhaps most impressive for BMY was the recent warm reception for its jointly produced Eliquis blood thinner after a big study, paving the way to tap into sales of as much as $3 billion a few years down the road.

And lest you think that this potential blockbuster is a one-trick pony, BMY also has made strides in several smaller but highly lucrative categories. From a new melanoma drug Yervoy, a cancer treatment that costs about $100,000 per patient, to anti-rejection drug Nulojix that received approval for use in the U.S. and Europe to aid kidney transplants, Bristol-Myers Squibb is working hard to build a suite of powerful drugs. That could result in powerful revenue down the road.

In the immediate term, a 4.5% dividend paid for over a century is a great reason to give BMY stock a shot in your portfolio. Big Pharma has fallen on hard times, but the outperformance of Bristol-Myers proves it could be the best opportunity this sector has to offer.